TMI Blog2018 (8) TMI 1206X X X X Extracts X X X X X X X X Extracts X X X X ..... . - I.T.A. No. 334/2017 - - - Dated:- 8-8-2018 - THE HON BLE DR.JUSTICE VINEET KOTHARI AND THE HON BLE MRS.JUSTICE S.SUJATHA Mr. K.V.Aravind, Adv. for Appellants Revenue Mr. Sandeep Huilgol, Adv. for Mr. T.Suryanarayana, Adv. Respondent Assessee ORDER This Appeal is filed by the Revenue purportedly raising substantial questions of law arising from the Order of the Income Tax Appellate Tribunal, A Bench, Bangalore, in IT [TP] A No.334/Bang/2013 dated 29.11.2016 relating to the Assessment Year 2008-09. 2. The substantial questions of law framed by the Revenue in the Memorandum of Appeal are as under: 1. Whether in the facts and circumstances of the case, the Tribunal is right in law in directing the assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellicom P. Ltd., Modi-tek Tech Ltd., and R.Systems Ltd., on the basis of low turnover by following its earlier decision which has not reached finality without appreciating that even when the said comparables are chosen by TPO after applying required tests and without appreciating that the sales turnover of the company does not have any impact on the margins earned and there is no correlation between size of the company and the profit margins reported when the said companies have satisfied all the qualitative and quantitative filters? 4. Whether in the facts and circumstances of the case, the Tribunal is right in law in excluding the comparables, namely, M/s. Infosys BPO Ltd., and M/s. Cosmic Global Ltd., by following its earlier order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterpretation would run counter to the legislative intent and would be impermissible. 18. XXXXXX 19. In the instant case, if the deductions on freight, telecommunication and insurance attributable to the delivery of computer software under Section 10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the Respondent which could have never been the intention of the legislature. 20. Even in common parlance, when the object of the formula is to arrive at the profit from export business, expenses excluded from export turnover have to be excluded from total turnover also. Otherwise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at this company is engaged in the business of providing services ranges from high end KPO Services to development of product and routine low and high end services. By following the order of the co-ordinate bench (supra), we direct the A.O/TPO to exclude this company from the set of comparables. 43.3. Having considered the rival submissions as well as the relevant material on record, we note that the functional comparability of this company has been examined by this Tribunal in the case of Symphony Mzrketing Solutions India Pvt. Ltd. Vs. ITO (supra) in paras 22 23 as under: Xxxx Following the earlier order of this Tribunal, we direct the Assessing Officer to exclude this company from the set of comparables. Regarding S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. are part of TP Study. The assessee has not filed any additional ground for seeking the exclusion of these companies from the set of comparables. Further we find that before the CIT (Appeals) the assessee has raised the objections only in respect of turnover filter to be applied. Accordingly, in the Whether on the facts and in the circumstances of the case, as well as in view of the fact that the comparability of these two companies have already been considered by the co-ordinate bench of this Tribunal, we set aside this issue to the record of the TPO/AO for reconsideration of the issue of functional comparability in the light of the decision of the co-ordinate bench in the case of e4e Business Solutions India Pvt. Ltd. Vs. DCIT (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been rightly picked up or not, Filters for arriving at the correct list of comparables have been rightly applied or not, do not in our considered opinion, give rise to any substantial question of law. 56. We are therefore of the considered opinion that the present appeals filed by the Revenue do not give rise to any substantial question of law and the suggested substantial questions of law do not meet the requirements of Section 260-A of the Act and thus the appeals filed by the Revenue are found to be devoid of merit and the same are liable to be dismissed. 57. We make it clear that the same yardsticks and parameters will have to be applied, even if such appeals are filed by the Assessees, because, there may be cases where t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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